Today is the day: after a year of working on debt elimination (an ongoing process now focused on two remaining large debts), I actually get to have some fun with my money. I get to begin investing.
This may or may not be a good thing.
Several years ago, the MNF guys formed an investment club. We pooled a thousand dollars and voted on which stocks to purchase. Then, every month, we each pooled another $300 to buy something new. We dreamed big — we were going to be rich!
This worked well for a while; we had caught the very tail of the tech-stock boom. However, things quickly headed south. We threw good money after bad. We didn’t approach our investments from any sort of logical perspective: our choices were based on emotion rather than actual research. A couple of us were resentful after we’d spent hours researching particular stocks, only to have our suggestions passed over in favor of passionate arguments from people who had done no research at all. (I still make snotty comments about Autobytel (ABTL), which I wanted to purchase at $1.58/share.)
The group lost money, but we learned a lot. I don’t regret the experience.
Now I’m ready to give it a go on my own. I still lack market wisdom, but that will come with experience. Paul C. and Nick have been giving me advice, but ultimately I’m on my own. Until I get a feel for things, I’m simply going to “buy low, sell high”. (Paul is urging me to develop a set of parameters for both the purchase and the sale of stocks. I’m sure his advice is sound.)
What have I selected as my first investment? I’m going to pump money into a 2005 Roth IRA, trying to max it out by April. As a first step, this afternoon I’m putting $200 into General Motors (GM), which is trading near historic lows (and which also pays a quarterly dividend).
I hope I get a chance to sell high!